Richardson v. Check Systems Recovery LLC
Filing
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OPINION AND ORDER granting 8 MOTION for Default Judgment. The Clerk is directed to ENTER FINAL JUDGMENT in this case stating: Final judgment is entered in favor of plaintiff Lisa Richardson and against defendant Check Systems Recovery, LLC, in the amount of $4,077.00. Signed by Senior Judge James T Moody on 12/5/12. (mc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
LISA RICHARDSON,
)
)
Plaintiff,
)
)
v.
)
)
CHECK SYSTEMS RECOVERY, LLC, )
)
Defendant.
)
No. 2:12 CV 106
OPINION and ORDER
I.
BACKGROUND
On March 12, 2012, plaintiff Lisa Richardson filed suit against defendant Check
Systems Recovery, LLC, for alleged violations of the Fair Debt Collections Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq.1 (DE # 1.) A summons returned executed by plaintiff
indicates that defendant was served March 20, 2012. (DE # 5.) As a result, defendant
had until April 10, 2012, to file a responsive pleading. See FED. R. CIV. P. 12(a)(1)(A)(I)
(requiring defendant to serve answer within 21 days after being served with summons
and complaint). To date, defendant has not filed any responsive pleading or otherwise
appeared in this case. At plaintiff’s request, the clerk of court entered defendant’s
default on May 29, 2012. (DE # 7.) Plaintiff filed this motion for default judgment on
July 20, 2012 (DE # 8), to which defendant has not responded. Plaintiff seeks statutory
damages, attorneys’ fees and costs, and actual damages for emotional distress.
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Plaintiff also sued under the Electronic Funds Transfer Act (“EFTA”), 15 U.S.C.
§ 1693, et seq., but appears to have abandoned that claim as it is excluded entirely from
the motion for default judgment.
II.
LEGAL STANDARD
The court may enter default judgment against a party against whom affirmative
relief is sought when it fails to plead or otherwise defend. FED. R. CIV. P. 55(b)(2). The
decision to enter a default judgment lies within the discretion of the district court.
O'Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993). If the court
determines that the defendant is in default, all well-pleaded allegations of the
complaint, except those relating to the amount of damages, will be taken as true. Black v.
Lane, 22 F.3d 1395, 1399 (7th Cir. 1994). The court may hold a hearing or conduct an
investigation to determine the amount of damages, FED. R. CIV. P. 55(b)(2), however, no
investigation is needed if “the amount claimed is liquidated or capable of ascertainment
from definite figures contained in the documentary evidence or in detailed affidavits.”
Dundee Cement Co. v. Howard Pipe & Concrete Prods. Inc., 722 F.2d 1319, 1323 (7th Cir.
1983).
III.
FACTS
Based on defendant’s default, the court takes the allegations in the complaint as
true. On an unknown date in October of 2011, defendant telephoned plaintiff in an
attempt to collect a $507.57 debt. The debt originated with Fast Cash Personal Loans,
but was later transferred to defendant. Plaintiff told defendant she did not have funds
to pay the amount in full, but could set up a payment arrangement. Defendant
informed plaintiff that if she did not pay the debt, it was going to “file a case against”
her.
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On another unknown date in October, but sometime prior to October 11,
plaintiff’s doorbell rang. Plaintiff did not answer the door. Plaintiff called defendant
and asked defendant if it had sent a process server to her door. Plaintiff claims that
defendant falsely responded that it had done so. Plaintiff contends that this
representation was false because no lawsuit had actually been filed against her.
Plaintiff then told defendant that she wished to pay the debt through a payment
agreement. Defendant claimed that it would allow her to pay the debt in four payments
on October 11, October 24, November 21, and December 19, 2011. Plaintiff gave
defendant her bank account information and orally authorized the payments.
Defendant told plaintiff that this arrangement was fine and would satisfy her debt.
Defendant successfully transferred all of the funds from plaintiff’s account on the
four predetermined dates. Defendant did not provide plaintiff with written notification
of its intent to debit the payments from her account before effectuating the withdrawals,
nor had defendant obtained plaintiff’s written authorization before doing so. Defendant
has not provided any notice to plaintiff that her debt has been paid in full, as it
promised to do.
IV.
LEGAL CONCLUSIONS
Defendant’s act of falsely informing plaintiff that it had sent a process server to
her house, even though no lawsuit had been filed, was a “false representation of . . . the
character, amount, or legal status of any debt,” 15 U.S.C. § 1962e(2)(A), a “false
representation or deceptive means to collect or attempt to collect any debt,” id.
§ 1962e(10), and an “unfair or unconscionable means to collect or attempt to collect any
debt,” id. § 1692f.
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However, the court disagrees with plaintiff that defendant violated 15 U.S.C.
§ 1692e(5). Section 1692e(5) prohibits a collector from making threats to take action that
it cannot legally take or that is not intended to be taken. Plaintiff’s Section 1692e(5)
claim is presumably based on defendant’s threat to sue her. However, plaintiff does not
allege facts suggesting that defendant legally could not sue her or did not intend to sue
her.
The court also disagrees with plaintiff that defendant’s act of accepting plaintiff’s
oral authorizations to debit money from her account, and then debiting the money from
her account without written notification, violated 15 U.S.C. § 1692f(2). That section
prohibits “[t]he acceptance by a debt collector from any person of a check or other
payment instrument postdated by more than five days unless such person is notified in
writing of the debt collector’s intent to deposit such check or instrument not more than
ten nor less than three business days prior to such deposit.” 15 U.S.C. § 1692(f)(2). It is
quite clear in this case that plaintiff drafted no checks, postdated or otherwise. Plaintiff
appears to consider an oral authorization for a future electronic transfer as analogous to
a postdated check, but plaintiff provides no legal authority for such a conclusion and
the court could not locate any authority in its own research. Accordingly, the court
rejects plaintiff’s contention that a violation of 15 U.S.C. § 1692f(2) occurred in this case.
V.
DAMAGES & FEES
A court may award an aggrieved FDCPA plaintiff “statutory” damages, not to
exceed $1,000. 15 U.S.C. § 1692k(a)(2)(A). The court should consider “the frequency and
persistence of noncompliance by the debt collector, the nature of such noncompliance,
and the extent to which such noncompliance was intentional.” Id. § 1692(b)(1).
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Defendant’s act of misleading plaintiff regarding whether a lawsuit had been
filed against her was a single incident. In cases involving single, technical violations, an
award of $500 has been deemed appropriate. See, e.g., Dona v. Midland Credit Mgmt., Inc.,
No. CV 10–0825, 2011 WL 941204, at *3 (E.D.N.Y. Feb. 10, 2011) (awarding $500 in
statutory damages for single violation on a default judgment; defendant left a message
on the plaintiff’s answering machine without indicating that the call was from a debt
collector for the purposes of collecting a debt); Nero v. Law Office of Sam Streeter, P.L.L.C.,
655 F. Supp. 2d 200, 210 (E.D.N.Y. 2009) (awarding $500 in statutory damages on a
default judgment; defendant failed to inform the plaintiff that she was required to
request validation of the debt in writing to preserve her rights).
However, the nature of defendant’s violation was not technical; rather it
appeared to be an overt act of deception, and not an accidental one. Non-technical
violations have been found to justify awards of $1,000, the maximum permitted under
the statute, though such cases often include repeated violations. See, e.g., Crass v. Marval
& Assocs. LLC, No. 10C0058, 2010 WL 2104174, at *1 (E.D. Wis. 2010) (awarding $1,000 in
statutory damages on default judgment; defendant contacted plaintiff multiple times at
work concerning a debt that had already been waived and discharged by original
creditor and called plaintiff’s son leaving messages including language such as
“investigation unit,” suggesting that criminal charges had been filed). Given the fact
that the violation in this case consisted of a single incident, but was overtly deceptive
and non-technical in nature, the court finds that an award of $750 in statutory damages
is appropriate.
5
A debt collector who violates the FDCPA is also liable for actual damages
sustained. 15 U.S.C. § 1692k(a)(1). FDCPA actual damages encompass damages for
emotional distress. Minnifield v. Johnson & Freedman, LLC, 448 Fed. Appx. 914, 917 (11th
Cir. 2011); Johnson v. Eaton, 80 F.3d 148, 152 (5th Cir. 1996); Ford v. Consigned Debts &
Collections, Inc., No. 09–3102, 2010 WL 5392643, at *5 (D.N.J. Dec. 21, 2010) (collecting
cases). However, in this case, plaintiff’s request for damages for emotional harm is
rejected because plaintiff fails to provide a reasonably detailed explanation of the
emotional injuries suffered. See Denius v. Dunlap, 330 F.3d 919, 929 (7th Cir. 2003) (“bare
allegations . . . are not sufficient to establish injury unless the facts underlying the case
are so inherently degrading that it would be reasonable to infer that a person would
suffer emotional distress from the defendant’s action”); Crass, 2010 WL 2104174, at *1
(denying request for damages for emotional harm under FDCPA for same reason).
Plaintiff’s conclusory allegations that she has “suffered mental anguish and emotional
distress” and that defendant “caused me a lot of stress” (DE # 8-1 at 6, Pl.’s Aff. ¶ 61)
are insufficient to establish plaintiff’s emotional distress. Crass, 2010 WL 2104174, at *1.
Plaintiff does not present evidence establishing such damages (such as the report of a
treating physician), and defendant’s conduct is not so inherently degrading as to
support an inference of emotional distress.
Finally, plaintiff requests attorneys’ fees and costs as part of this default
judgment. A successful FDCPA plaintiff is entitled to “the costs of the action, together
with a reasonable attorney’s fee as determined by the court.” 15 U.S.C. § 1692k(a)(3). In
this case, plaintiff’s counsel has submitted detailed billing statements establishing
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reasonable attorneys’ fees in the amount of $2,912.00. Plaintiff’s counsel has also
demonstrated that they expended $415.00 on filing the complaint and serving the
summons. Accordingly, the court awards plaintiff $3,327.00 in attorneys’ fees and costs.
VI.
CONCLUSION
For the foregoing reasons, plaintiff’s motion for default judgment is GRANTED.
(DE # 8.) The Clerk is directed to ENTER FINAL JUDGMENT in this case stating:
Final judgment is entered in favor of plaintiff Lisa Richardson
and against defendant Check Systems Recovery, LLC, in the
amount of $4,077.00.
SO ORDERED.
Date: December 5, 2012
s/ James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT
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